Cost Management

Project Cost Management includes the processes involved in planning, estimating, budgeting, and controlling costs so that the project can be completed within the approved budget.

The Project Cost Management processes include the following:

•Cost Estimating

developing an approximation of the costs of the resources needed to complete project activities. Estimating schedule activity costs involves developing an approximation of the costs of the resources needed to complete each schedule activity. In approximating costs, the estimator considers the possible causes of variation of the cost estimates, including risks.

•Cost Budgeting

Cost budgeting involves aggregating the estimated costs of individual schedule activities or work packages to establish a total cost baseline for measuring project performance. The project scope statement provides the summary budget. However, schedule activity or work package cost estimates are prepared prior to the detailed budget requests and work authorization.

•Cost Control

Influencing the factors that create changes to the cost baseline, Ensuring requested changes are agreed upon , Managing the actual changes when and as they occur, Assuring that potential cost overruns do not exceed the authorized funding, periodically and in total for the project, Monitoring cost performance to detect and understand variances from the cost baseline, Recording all appropriate changes accurately against the cost baseline, Preventing incorrect, inappropriate, or unapproved changes from being included in the reported cost or resource usage, Informing appropriate stakeholders of approved changes, Acting to bring expected cost overruns within acceptable limits. Project cost control searches out the causes of positive and negative variances and is part of Integrated Change Control.